If I’m behind 1 month payments on my vehicle insurance and have a claim pending, can my insurance decline my claim?
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If I’m behind 1 month payments on my vehicle insurance and have a claim pending, can my insurance decline my claim?
My vehicle was broken into and my ignition was badly damaged by the thieves. All of the necessary people were informed and a case was opened up and all paperwork I had to fill in was done and sent through to my insurer. I was informed that I was behind on my payments but I did a cash deposit for the month last month into my account and the money was taken out by by bank as I am under debt review. I was also sent a message to do a cash deposit 3 days ago which at that time I did not have funds available on. Then, yesterday, I was informed that due to non-payment my insurance cannot help me. Can they do this with me missing only 1 month/s payment?
Asked on February 17, 2016 under Insurance Law, Alaska
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
Yes, if you defaulted on your obligations, by missing even one monthly payment, the insurer could decline your claim. Insurance is a contract: each party must live up to all its obligations in order for the other side to be required to honor its own obligations. If you missed a payment--for any reason; the reason is irrelevant (e.g. it doesn't matter if the bank took out the money)--then you breached your obligations. That breach entitles the insurer to not have to pay a claim.
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